Deep-rooted problems in the City of Elk Grove’s transit system led to the city overpaying a private contractor by more than $300,000, an independent audit has found.

The November audit of e-tran also found that the city kept no systematic record of customer complaints, did not plan routes properly and intentionally allowed routes to run at a different schedule than that posted.

In the past few weeks, city officials took steps to overhaul the e-tran system, replacing its manager and squeezing new concessions from transit provider MV Transportation.

“We’re the steward of the public’s money and what went on is unacceptable, and it’s being remedied,” Mayor Jim Cooper told Elk Grove Patch Friday.

Since the city started its own transit service in 2005—contracting out with MV to run buses and shuttles—e-tran has faced challenges ranging from service cuts to defective buses. In a routine audit requested by the city's audit committee, independent firm Sjoberg Evashenk Consulting studied the period from September 2009 through June 2011. The firm found that while e-tran has improved in many areas, the progress fell short of what was needed to provide reliable customer service.

In interviews, representatives of both the city and Fairfield-based MV admitted some of the blame for the system’s woes.

“Although there was a lot of mismanagement on the city side, we take some responsibility on the accounting,” said Michelle Smira, a public relations consultant for MV. “We need to be communicating better.”

Overpayments to contractor

MV signed a new five-year contract with the city in 2009—the same year the company donated a total of more than $25,000 to Elk Grove City Council members' campaign committees.

Much of the $302,700 in extra payments from the city to MV identified in the audit involve the compressed natural gas fueling station Elk Grove began building for its buses in 2009.

While the station was under construction, MV charged the city for the extra staff time it took drivers to transport buses to south Sacramento and Davis for fueling—fees not specified in its contract, the report says.  Even after the station was built, MV continued to bill the city those fees, according to auditors, to the tune of more than $200,000.

MV says city staff informally authorized the expenses, but no changes to the contract were ever made.

In another handshake agreement, city staff waived several months’ worth of penalties MV owed the city for failing to meet performance goals, the audit says, costing the city about $45,000.

Buses ran late, took off early

The audit also found buses often failed to stick to posted departure times, echoing a complaint sometimes made by riders. At times, as many as one-third of e-tran buses were running behind or ahead of schedule, auditors found.

That wouldn’t surprise Karina Alvarez, a senior at Franklin High School who often rides e-tran buses to and from school.

“A lot of kids arrive half an hour late,” because of problems with buses, she said. “You always hear announcements [on the school’s PA system] saying, ‘We’re sorry, teachers, the bus was late, so please excuse your students.”

In some cases, auditors and MV staff said, city managers actually directed commuter buses to leave a stop early if passengers got impatient.

“Until the City resolves the issue of on-time performance the City will most likely experience customer dissatisfaction,” auditors wrote.

City spokesperson Christine Brainerd said the city was working to improve on-time performance, and that 98 percent of buses ran on time in December.

City staff in November slapped MV with $120,000 in fines for late and early departures. But MV says the fines covered months of service, and they never received a detailed breakdown of the charges.

“It’s kind of hard to reprimand a driver for missing a route 10 months ago,” said Smira.

Fixing the system

Auditors blamed some service problems on the city’s failure to do regular route planning and analysis, a standard practice at transit agencies.

City officials disagreed, saying they do review routes periodically but will be stepping up their efforts. They also complain management turnover at MV has meant accurate information about the system was hard to come by.

At the City Council’s Jan. 25 meeting, Mayor Cooper blasted the company for what he said were dozens of changes in the personnel overseeing Elk Grove’s contract since 2005.

“To have 30 folks come and go, that’s a red flag,” he said.

Representatives of MV disputed the exact figure but admitted the turnover had an impact. The company also agreed to halve the hourly rates it charges the city on reverse commute routes, which will help the city fill those buses with state employees coming to work at the new California Prison Health Care Services headquarters on Laguna Springs Drive.

For its part, the city has replaced Transit Manager Tiffani Fink with Kara Reddig, formerly an assistant to City Manager Laura Gill, on an interim basis. Fink could not be reached for comment, and Brainerd wouldn’t say whether Fink was fired or voluntarily resigned.

The city and MV are also working on a mystery shopper program in which staff will anonymously ride buses and call the system’s information hotline to assess how customers are being treated. And Brainerd said the city will do a weekly review of MV’s customer complaint log, which the audit said was not accurate.

As for the overpayments auditors identified, it remains to be seen whether the city will recover that money, said Councilmember Steve Detrick.

 “That’s all under review with the new interim transit manager,” said Detrick, who sits on the city’s audit committee. “We have to get our own house in order before we can sit down with MV.”